Mobile Mini, Inc. (NASDAQ:MINI) Q4 2019 Earnings Conference Call - Final Transcript

Jan 29, 2020 • 09:00 am ET


Mobile Mini, Inc. (NASDAQ:MINI) Q4 2019 Earnings Conference Call - Final Transcript


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Kelly Williams

the product mix in North America Storage Solutions. Ground level offices or GLOs positively impacted rental revenue growth from all perspectives; rate, volume and mix. For the fourth quarter the core rates on GLOs increased by a meaningful 10% with rates on newly placed GLOs up 11.8%. Average GLO units on rent for the quarter increased by 7% year-over-year. Growth potential for GLOs stems from strong customer demand and a higher price point than containers.

In North America Storage Solutions, national account revenue continues to be greater than 35% of segment rental revenue on an annual basis. We believe that building closer national customer relationships will continue to grow this revenue. As we anticipated on the last earnings call, the peak seasonal units on rent in 2019 did indeed beat 2017's peak, but trailed 2018s due to the one-time large volume order in late 2018. This unfavorable comparison affected the latter part of Q4 2019, and will impact trucking and rental revenue in Q1 2020 as a comparison to Q1 2019. Our core units on rent remain above prior year and our pipeline of pending orders leaves us optimistic about 2020 in North America, storage.

In 2019, we further separated ourselves from the pack as a premium provider by expanding our brand as a one-stop shop through managed services, where we partner with strategic vendors to arrange for re-rented items. In 2019 managed services conducted over 5,100 transactions.

Tank & Pump Solutions rental revenues increased 5% for full-year 2019 with adjusted EBITDA margin expansion of 230 basis points to 34%, primarily due to a strong performance of 16% year-over-year rental revenue growth in the first half of 2019. For Q4 2019 Tank & Pump rental revenues decreased to 11%, compared to the prior year, while achieving adjusted EBITDA margin of 32%. Revenue related to the downstream market, which represents a majority of our Tank & Pump business was down compared to the prior year fourth quarter.

Q4 2018 results included several larger turnarounds that did not repeat this year and we experienced more softening in the underlying industrial market in Q4 2019 than expected. Our year-over-year comps as well as the current environment of the industrial market will make the first half of the year our most challenging. However, this division continues to see improved operating efficiency and we anticipate revenue and EBITDA growth of the business for the full-year 2020.

In the UK fourth quarter rental revenue was down approximately 4% year-over-year in local currency, a healthy rate increase of 2.4% was offset by decreased average units on rent and unfavorable mix. In the UK, recently implemented changes to conform our sales model and other infrastructure to North America operations have stabilized the business and improve the efficiency of our overall operational structure with the operational changes we anticipate margins to improve over prior year throughout 2020.

I'm very pleased that Mobile Mini continues to be recognized as an employer of choice. We were honored to be named one